Dylan Raymond owns a lunch-only downtown cafe close to the state capitol. Its cost structure is as follows:

Monthy fixed costs= $30,000

Variable costs/meal sold= $4

Average selling price= $12

Average tax rate= 25%

Required:

1. What is the cafe's contribution margin?

2. What is the cafes contribution margin ratio?

3. What is the monthly breakeven point in meals sold?

4. If Dylan desires his cafe to make a monthly profit of $5,000, what must be its: a. pretax income? b. total revenue

5. When the cafe makes a monthly profit of $5000, what is its margin of safety?